83 Mo. App. 669 | Mo. Ct. App. | 1900
Tbe defendant is organized under tbe laws of Missouri as a building and loan association with its chief office at tbe city of Hannibal, Missouri. In 1892 one O. E. Bonnefon was tbe owner of eight shares of tbe stock of defendant of tbe par value of one hundred dollars each. In that year Bonnefon borrrowed of tbe association $700 and pledged bis stock as collateral security for tbe loan. As further security be executed a deed of trust on certain lots owned by him and situated in tbe city of Aurora, in Lawrence county, Missouri. One Thompson was tbe local agent of defendant at Aurora, who solicited loans and reported upon tbe value of real estate offered as security. On tbe eighth day of July, 1892, Bonnefon applied to Thompson for tbe loan. His application for tbe loan was written and signed in Aurora and sent from there to tbe company at Hannibal. In tbe application Bonnefon agreed to pay six per cent interest on tbe loan and be bid as a monthly premium forty cents on tbe hundred dollars, which be agreed to pay each
Section 2812, Revised Statutes 1889, governing building and loan associations provides that in making loans “the directors of the corporation shall hold stated meetings, at which such sums of money as they may determine shall be offered for loan to all the members in open meeting. The shareholder who shall bid the highest for the preference, or priority of loan, shall be entitled to receive a loan whose amount shall not exceed the number of shares of stock held by
It was not necessary, as counsel for respondents claim, that Bonnefon should have made his bid in person. The written bid forwarded to the general office by Thompson was sufficient. This was the decision of the chancery court of appeals of Tennessee in Hughes v. Bldg, and Loan Association, reported in 46 S. W. Rep. 362. The same ruling was made by our supreme court in Springfield Engine and Thresher Company v. Donovan, 49 S. W. Rep. 500.
If the minutes of the meeting of the board of directors of July 14 are accepted as true, the loan was made to Bonnefon in full compliance with the statute, for the record shows a loan made in open meeting and that the premium bid was the result of competitive bidding. But the truth of the minutes are contradicted by the testimony of Thompson, the local agent, as appears by the following excerpts from his testimony:
“Q. Now, I will get you to state what condition this loan was made under to Mr. Bonnefon by the association through you as its agent. In that connection state the facts; what was done by you and what Bonnefon did? A. (Taking application above referred to.) This handwriting looks like mine; there are some things in here I don’t think I ever put in there.
“Q. I will get you to state if that was the application furnished you by the defendant association and if that was in accordance with all the blank applications furnished you*675 while you were acting as their local agent there ? A. It is the same kind of a blank they use, it is not exactly the same kind of a blank they furnished at all times. My recollection was it wasn’t the ldnd of a blank that was used at that time.
“Q. I will get you to state under what condition now, this loan was made. Tell the court the conditions under which the company made the loan through you as local agent there. "What did you and what did Bonnefon do? A. Well, about the only thing Bonnefon had to do — he, of course come first about the stock; I think he had eight hundred dollars of stock there and he applied for eight hundred dollars of loan and agreed to pay on that loan fifteen dollars a month for one hundred months; that was the agreement or understanding.
“Q. That would be one dollar and fifty cents on the hundred ? A. That was the proposition they made to loan their money for one dollar and fifty cents on each one hundred dollars loan.
“Q. I will ask you to state what your instructions were with regard to making those other loans at the time? A. My instructions were to have application filled out and set forth the value of the property and then have the value of the property appraised by the board of directors and the appraisement would be put on that application there and it would be-understood that he was to pay so much a hundred interest and premium and so much dues each month on ■each hundred dollars and the application was sent to the board of directors at Hannibal and if the security was found •satisfactory the money was furnished.
“Q. Who fixed the amount of interest, premium and dues that was to be paid for the loan in question ? A. The association, as I understood it; all their literature set forth the amount of the premium and the amount of charges that*676 would be made to those they loaned to; everybody the same.”
In opposition to this testimony and as tending to show that there was no fixed premium and that the bonus stated in the loan to Bonnefon resulted from competition in bidding, the defendant read the deposition of James Hayward, who previously and subsequently to making the loan to Bonnefon, was the actuary of the defendant company. The force of the testimony of this witness is very much weakened by the fact of his admission on cross-examination that he was not connected with the defendant company at the time Bonnefon borrowed the money, that he was not present at the meeting of the board of directors of July 14, and that his statements were based entirely on the minutes of that meeting and the usual methods adopted and followed by the company. The trial judge evidently credited the statements of Thompson. Accepting his testimony as true, the money was not awarded to the highest bidder, but to the competitor for the money who offered the most satisfactory security. In construing a like statute of the state of Tennessee the United States Circuit Court of Appeals in Douglass v. Kavanaugh, 90 Fed. Rep. 373, so decided in a case presenting a somewhat similar state of facts. It was there said: “This method was not in accordance with the charter power. There was no sale, no competitive bidding. The prefnium was not paid for precedence in obtaining a loan, but as a part of the price demanded by the lender from the borrower. The practice was in open and flagrant violation of the organic law of the corporation and premiums thus obtained were an unlawful exaction.” On this question of fact we are inclined to coincide with the circuit court, and so finding we must hold with him that the premiums collected on the Bonnefon loan were illegal exactions and rendered the transaction usurious.
It is stated generally in the books that the. defense of usury is personal to the debtor, but this statement of the
With the concurrence of the other judges, the judgment of the- circuit court will be affirmed. It is so ordered.